Harrison Ex Rel. Harrison v. Board of Regents

I attest to the accuracy and
integrity of this document
New Mexico Compilation
Commission, Santa Fe, NM
'00'05- 14:45:05 2013.11.07
Certiorari Granted, October 18, 2013, No. 34,349
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2013-NMCA-105
Filing Date: September 5, 2013
Docket No. 32,215
TRACI and KENNETH HARRISON,
Individually and as Parents and Next
Friends of BRILEY HARRISON,
Plaintiffs-Appellees,
v.
BOARD OF REGENTS OF THE UNIVERSITY
OF NEW MEXICO,
Defendants-Appellants,
and
LOVELACE HEALTH SYSTEM, INC.,
a New Mexico Corporation, and ABQ
HEALTH PARTNERS, LLC,
Defendants.
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Alan M. Malott, District Judge
Shapiro Bettinger & Chase LLP
Andrew D. Scholl
Carl J. Bettinger
Gregory W. Chase
Albuquerque, NM
for Appellee
Sutin, Thayer & Browne
Kerry Kiernan
1
Timothy J. Atler
Albuquerque, NM
Office of University Counsel
K. Lee Peifer
Kimberly N. Bell
Albuquerque, NM
for Appellants
OPINION
VANZI, Judge.
{1} The formal opinion filed in this case on August 28, 2013, is hereby withdrawn, and
this opinion is substituted in its place.
{2} District courts have the inherent authority to “impose a variety of sanctions on both
litigants and attorneys in order to regulate their docket, promote judicial efficiency, and deter
frivolous filings.” State ex rel. N.M. State Highway & Transp. Dep’t v. Baca, 1995-NMSC-
033, ¶ 11, 120 N.M. 1, 896 P.2d 1148 (internal quotation marks and citation omitted). The
question raised in this appeal is whether a district court’s inherent power to impose sanctions
includes the authority to issue a non-compensatory monetary sanction against a public entity.
We answer this question in the affirmative and therefore affirm the district court’s imposition
of a $100,000 sanction against Defendant-Appellant, the Board of Regents of the University
of New Mexico (the Regents), for willful and improper interference with a disclosed witness
in a matter pending before the district court.
BACKGROUND
{3} The facts underlying the imposition of sanctions in this case are not disputed by the
Regents on appeal. We therefore rely extensively below on the factual background that was
set forth in the district court’s letter decision imposing sanctions.
{4} In August 2009, Plaintiffs filed suit in district court against the Regents, along with
other parties, alleging medical malpractice in connection with a cesarean section/tubal
ligation surgery performed by physicians employed by the University of New Mexico
(UNM) Health Sciences Center. Plaintiffs subsequently retained Dr. Ian Paul to serve as an
expert witness in their case. At the time, Dr. Paul was a pathologist employed by the New
Mexico Office of the Medical Examiner (OMI) and was also a clinical assistant professor
in the Department of Pathology at the UNM Health Sciences Center. The conduct that led
the district court to impose sanctions against the Regents in this case occurred upon
Plaintiffs’ formal designation of Dr. Paul as one of their expert witnesses.
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{5} Scot Sauder, an attorney employed as in-house counsel by UNM, learned of Dr.
Paul’s designation as one of Plaintiffs’ medical expert witnesses. Sauder concluded that Dr.
Paul’s participation in the case was not in the best interests of the UNM Health Sciences
Center and, by extension, the Regents. At the time, Sauder was the head of the health law
section of the University Counsel’s office and was also serving as the manager of litigation
involving UNM Health Sciences Center, which included oversight of Plaintiffs’ case.
Sauder initially communicated his concerns regarding Dr. Paul’s expert testimony in the case
with Dr. Paul Roth, the chancellor of UNM Health Sciences Center, and he received
unquestioned approval from Dr. Roth to contact Dr. Paul’s supervisors regarding the matter.
Sauder then contacted Dr. Ross Zumwalt, who was Dr. Paul’s immediate supervisor at OMI,
to inform him of Dr. Paul’s plan to testify against another UNM physician and to end Dr.
Paul’s participation in the case. Dr. Zumwalt responded that he was familiar with Plaintiffs’
case as Dr. Paul had already informed him of his plan to testify as an expert witness for
Plaintiffs in the case. Dr. Zumwalt further stated, “I am sure the Regents desire that this case
be evaluated by competent, qualified, and unbiased experts. The Regents are fortunate that
Dr. Paul fits those criteria.”
{6} Sauder also spoke with Dr. Paul’s supervisor, Dr. Thomas Williams, the head of the
UNM Department of Pathology; however, nothing further happened until the case neared the
mediation deadline set by the district court approximately three months later. At that time,
Sauder contacted both of Dr. Paul’s supervisors, again suggesting that Dr. Paul’s
involvement in the case as Plaintiffs’ expert created a conflict of interest with the UNM
Health Sciences Center. He also informed them that Dr. Roth agreed with him and that he
believed Dr. Paul should withdraw from the engagement. The next day, Sauder reached to
outside counsel hired by the Regents to represent UNM in the litigation and informed her
that Dr. Paul would not be testifying in the case. Sauder later testified that by the time he
contacted outside counsel, he had already been assured by Dr. Williams that Dr. Paul would
be withdrawing from the case. However, Dr. Williams testified that he offered no such
assurance to Sauder. In fact, both of Dr. Paul’s supervisors later testified that they did not
believe it was appropriate or necessary for Dr. Paul to withdraw from the case.
{7} Within days of Sauder’s communications with Dr. Paul’s supervisors, Dr. Paul
withdrew from the case. In an email to Plaintiffs’ trial counsel informing him of his
decision, Dr. Paul stated that he had been under “a lot of pressure from the higher ups at
UNM” to withdraw. The district court noted that at the time these events unfolded, Dr. Paul
was under consideration for a significant job promotion. Dr. Paul later testified that he felt
intimidated and feared that his career was in jeopardy. He stated that he would not have
withdrawn from the case but for Sauder’s actions.
{8} Upon Dr. Paul’s withdrawal from the case, Plaintiffs filed a motion in district court
seeking sanctions against the Regents and their attorney, Sauder. Plaintiffs argued that the
manner in which Sauder caused Dr. Paul to withdraw from the case amounted to improper
witness interference and tampering and was a violation of a number of the Rules of
Professional Conduct governing attorneys. It also established that Sauder acted with the full
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support and encouragement of Dr. Roth. The district court held two hearings on Plaintiffs’
motion for sanctions. However, by the time the second hearing was held on Plaintiffs’
motion, the parties had already reached a settlement for the claims in the underlying case.
{9} Following the hearings, the district court issued a letter decision imposing sanctions
against the Regents and Sauder. The court stated in the decision that it was not persuaded
by Sauder’s position at the sanctions hearings that Dr. Paul’s involvement in the case
constituted an impermissible conflict of interest. The court found that there were no
applicable policies in effect at UNM under which Dr. Paul’s decision to testify as an expert
for Plaintiffs created an impermissible conflict of interest with the UNM Health Sciences
Center. The court stated “[t]hat any public entity, let alone the flagship University of this
State, believes it has such power to stifle comment is both terrifying and in violation of
public policy[.]” In addition, the court pointed out that Sauder could have, but failed to, file
a motion in open court in an attempt to prevent Dr. Paul from testifying, which would have
allowed both parties to develop their arguments and would have provided the district court
with an opportunity to determine whether Dr. Paul’s testimony would have been unduly
prejudicial to UNM or otherwise improper. The court found that Sauder instead acted
“internally, quietly . . . willfully and improperly interfered with a disclosed witness in
pending litigation before [the c]ourt” and that “[s]uch conduct was prejudicial to the interests
of the witness, the other litigants, and the administration of justice itself.” The court also
pointed out that Sauder’s “ ‘behind the scenes’ interference with a witness is just the kind
of conduct that fosters distrust and disdain for our profession and the [c]ourt system.”
{10} In determining that it could exercise “its inherent powers to control its docket and,
by extension, the behavior of litigants” to sanction Sauder and the Regents for their wrongful
conduct, the court noted that monetary sanctions were appropriate in the matter since the
underlying dispute between the parties had been settled. It further stated that the amount of
monetary sanctions had to be “sufficiently significant in light of the misconduct at issue and
the relative size and resources of the wrongdoers.” Accordingly, the district court ordered
the Regents to pay $32,000 to Plaintiffs for the attorney fees they had incurred in bringing
the motion for sanctions, the costs associated with locating a replacement for Dr. Paul, and
the fees that Plaintiffs incurred for Dr. Paul’s services prior to his withdrawal. Sauder was
personally sanctioned in the amount of $1500 to be paid to the Roadrunner Food Bank.
Lastly, the court sanctioned the Regents in the amount of $100,000 to be paid to four
charitable organizations.
{11} The Regents moved for reconsideration of the district court’s order, challenging only
the imposition of the $100,000 monetary sanction in their motion for reconsideration. The
Regents argued that the district court lacked the authority under its inherent power to impose
the $100,000 sanction because it was a punitive sanction in nature with no compensatory
aspect. They based their argument that such a sanction is not permitted against a public
entity such as the Regents under New Mexico law because such sanctions are punitive and
governmental entities are immune from punitive damages in civil actions for tort and
contract. The district court denied the Regents’ motion, concluding that the Regents’
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argument that the court’s inherent power does not include the authority to issue a non-
compensatory monetary sanction against a public entity was without merit. Noting that few
actions pose as dire a threat to the integrity of the courts as a litigant’s interference with
witnesses, the district court’s order further stated that the Regents’ conduct struck “at the
very core of the integrity of the judicial system and warrants the imposition of sanctions that
do more than merely compensate the other party for their fees and expenses incurred in
bringing the misconduct to the court’s attention. [The Regents’] conduct is an affront to the
court and every citizen of this state. Such an affront warrants imposition of sanctions severe
enough to put a stop to the practice.” (Internal quotation marks and citation omitted.) This
appeal followed.
DISCUSSION
{12} The dispositive issue raised in this appeal is whether a district court’s inherent power
to impose sanctions for a party’s misconduct during litigation includes the authority to issue
a non-compensatory monetary sanction against a public entity. On appeal, the Regents
contend that the district court lacked the authority under its inherent power to impose the
$100,000 non-compensatory monetary sanction against them because the sanction is purely
punitive in nature and therefore is not permitted against a public entity, such as the Regents,
under existing New Mexico case law and public policy grounds.
{13} Before we turn to address the Regents’ specific arguments, we first explain the very
limited nature of our appellate review in this case. The Regents’ arguments in this
appeal—as they were before the district court—are purely legal in nature; that is, the
Regents do not challenge the underlying facts that led the district court to impose sanctions
against the Regents as an exercise of the court’s inherent power. Specifically, the Regents
do not address whether the underlying facts of this case supported the imposition of the non-
compensatory monetary sanction, whether the circumstances were sufficiently egregious to
support the amount of the sanction, or the fact that the sanction was to be paid to four
charitable organizations. The Regents also raise no argument as to the propriety of the other
sanctions imposed by the district court. We therefore do not address those aspects of the
district court’s decision, and our appellate review is limited to the issue of addressing
whether, assuming the Regents’ conduct was sanctionable, the district court had the authority
at all to impose a monetary sanction outside of a compensatory award for costs and attorney
fees. See In re Doe, 1982-NMSC-099, ¶ 3, 98 N.M. 540, 650 P.2d 824 (stating that appellate
courts should not reach issues that the parties have failed to raise in their briefs).
A. Standard of Review
{14} We generally review a district court’s imposition of sanctions under its inherent
power for an abuse of discretion. Restaurant Mgmt. Co. v. Kidde-Fenwal, Inc., 1999-
NMCA-101, ¶ 8, 127 N.M. 708, 986 P.2d 504; see Gonzales v. Surgidev Corp., 1995-
NMSC-047, ¶¶ 31, 33, 120 N.M. 151, 899 P.2d 594. However, “even when we review for
an abuse of discretion, our review of the application of the law to the facts is conducted de
5
novo.” N.M. Right to Choose/NARAL v. Johnson, 1999-NMSC-028, ¶ 7, 127 N.M. 654, 986
P.2d 450 (internal quotation marks and citation omitted). “Accordingly, we may
characterize as an abuse of discretion a discretionary decision that is premised on a
misapprehension of the law.” Id. (alteration, internal quotation marks, and citation omitted).
In this case, the dispositive issue on appeal is a legal question, to which we apply de novo
review. If we conclude that the district court erred as a matter of law, then it necessarily
follows that the district court abused its discretion in imposing the $100,000 sanction against
the Regents because the decision was based on a misapprehension of the law.
B. The Regents’ Arguments
{15} “Inherent judicial power is the power necessary to exercise the authority of the court”
and includes the authority to sanction. In re Jade G., 2001-NMCA-058, ¶ 27, 130 N.M. 687,
30 P.3d 376. “The rationale underlying the existence of the inherent power of the courts is
that a court must be able to command the obedience of litigants and their attorneys if it is to
perform its judicial functions.” Restaurant Mgmt. Co., 1999-NMCA-101, ¶ 11 (internal
quotation marks and citation omitted). “Under its inherent authority, a court may sanction
parties and attorneys to ensure compliance with the proceedings of the court.” In re Jade
G., 2001-NMCA-058, ¶ 28.
{16} A fundamental aspect of a court’s exercise of its inherent power is the principle that
a court’s inherent authority extends to all conduct before the court and to all parties
appearing before the court, regardless of the party’s status as a private litigant or as a
governmental/public entity. See Baca, 1995-NMSC-033, ¶ 27 (noting that “a court’s
inherent authority extends to all conduct before that court”); State v. Blenden, 748 So. 2d 77,
88-89 (Miss. 1999) (stating that “a court’s inherent power to control actions before [it] is
equally applicable to the [s]tate. When the [s]tate enters the court as a litigant, it places itself
on the same basis as any other litigant; subjecting itself to the inherent authority of the court
to control actions before it, just as any other litigant”); see also Noble Cnty. v. Rogers, 745
N.E.2d 194, 198-99 (Ind. 2001) (emphasizing that “[i]t is beyond question that [a court’s
inherent] power extends to governmental attorneys and parties” and that “while the
[l]egislature may shield the [s]tate from substantive tort liabilities, it may not immunize the
[s]tate from [the judiciary’s inherent] power to sanction the attorneys and parties appearing
before [the court]”). It follows that a district court’s authority to impose sanctions under its
inherent power is not curtailed by the fact that the wrongful party happens to be a
governmental or public entity. We note that prior New Mexico appellate decisions have
upheld a lower court’s authority to impose sanctions against a governmental or public entity
as a valid exercise of that court’s inherent power. See, e.g., Baca, 1995-NMSC-033, ¶¶ 13,
23 (holding that a New Mexico court may invoke its inherent power to award attorney fees
as a sanction against the state for bad faith litigation); State v. Candelaria, 2008-NMCA-120,
¶ 22, 144 N.M. 797, 192 P.3d 792 (upholding the metropolitan court’s dismissal of a
criminal prosecution as a sanction against the state as a valid exercise of that court’s inherent
authority).
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{17} In the case before us, the Regents maintain that they do not challenge the district
court’s authority to exercise its inherent power against both public entities and private
litigants. Instead, they raise a challenge to the nature of the sanction that a district court may
impose against a public entity under the court’s exercise of its inherent power. Specifically,
the Regents contend that the monetary sanction imposed against them constitutes an
impermissible sanction because it was not compensatory in nature—that is, it was not
intended for Plaintiffs’ benefit at all—and instead, was solely a punitive sanction designed
to punish the Regents for their conduct and to act as deterrence. Thus, according to the
Regents, while a district court has the inherent authority to impose non-compensatory
monetary sanctions against private litigants, their lawyers, or witnesses, it has no such
corresponding authority with regard to public entities regardless of the egregiousness of their
conduct. Relying exclusively on Torrance County Mental Health Program v. New Mexico
Health & Environment Department, 1992-NMSC-026, 113 N.M. 593, 830 P.2d 145, and
Baca, the Regents contend that New Mexico case law and public policy clearly establish that
district courts are prohibited from imposing a purely punitive sanction against a public
entity.
1. The Supreme Court’s Decisions in Torrance County and Baca Do Not Dictate
Reversal of the Non-Compensatory Monetary Sanction Imposed by the District
Court
{18} As an initial matter, we reject the Regents’ argument that our Supreme Court’s
decisions in Torrance County and Baca are controlling. In Torrance County, our Supreme
Court held that punitive damages are not recoverable from a governmental entity in a breach
of contract action. See 1992-NMSC-026, ¶ 2. The question there was whether our
Legislature’s silence on punitive damages could be read as expressing an intention to waive
immunity for punitive damages in contract cases. Id. ¶ 16. In reaching its holding, the Court
weighed policy interests favoring the recovery of punitive damages against those favoring
immunity for governmental entities. Id. ¶¶ 24-31. The Court ultimately concluded that the
policy interests in favor of granting immunity to governmental entities—such as the need
to protect public revenues and the injustice of punishing innocent taxpayers rather than the
officials at fault, id. ¶¶ 27-29—outweighed the countervailing policy interests favoring the
recovery of punitive damages—deterring abuse of governmental power and promoting
accountability among government officials, id. ¶ 25. The Court stated that allowing civil
juries to assess punitive damages against governmental entities in breach of contract cases
would “punish[] only the taxpayers, who took no part in the commission of the [wrongful
act]” and be a “windfall to a fully compensated plaintiff.” Id. ¶ 28 (internal quotation marks
and citation omitted).
{19} Torrance County is not controlling in this case for two reasons. First, the Supreme
Court’s analysis in Torrance County did not include any consideration or application of the
concept of a district court’s inherent power and, in particular, its inherent power to sanction
conduct that abuses the judicial process. See Fernandez v. Farmers Ins. Co. of Ariz., 1993-
NMSC-035, ¶ 15, 115 N.M. 622, 857 P.2d 22 (stating the general rule that “cases are not
7
authority for propositions not considered” (internal quotation marks and citaiton omitted)).
Second, Torrance County concerned the award of punitive damages by civil juries, which
is a distinct legal concept from the exercise of a court’s inherent power to impose a monetary
sanction for misconduct by litigants, their lawyers, and others who participate in judicial
proceedings over which the judge is presiding. Although there are several differences
between the punitive damage awards and non-compensatory monetary sanctions, we point
to the following: (1) “[t]he award of punitive damages is based on a party’s misconduct
toward[] the individual[,]” whereas “[a]n award of sanctions is based on a party’s
misconduct toward[] the court,” Gonzales, 1995-NMSC-047, ¶¶ 12-13; (2) punitive damage
awards are entrusted to a fact finder, while the assessment of sanctions falls solely within the
ambit of the court’s constitutional power; and (3) “[p]unitive damages . . . are not intended
to compensate the injured party,” Torrance County, 1992-NMSC-026, ¶ 28, while sanctions
imposed under the court’s inherent authority can be both compensatory and punitive in
nature, see Baca, 1995-NMSC-033, ¶ 22. Consequently, we see no basis for applying
Torrance County to the case before us.
{20} We are likewise not persuaded by the Regents’ reliance on Baca. In Baca, the
Supreme Court held that a district court can exercise its inherent power to award attorney
fees against a governmental entity for bad faith litigation. 1995-NMSC-033, ¶¶ 12, 18.
Similar to the Regents’ position in this case, the governmental entity in Baca argued that a
sanction of attorney fees could not be imposed against them based on their status as a
governmental entity under the Supreme Court’s earlier decision in Torrance County. See
Baca, 1995-NMSC-033, ¶ 18. The Court disagreed and concluded instead that there were
distinct differences between attorney fees and punitive damages awards. See id. ¶¶ 21-23
(noting that there are certain checks upon an attorney fees award that are absent from a
punitive damages award and that attorney fees have both compensatory and punitive aspects,
whereas the purpose of punitive damages awards is punishment and deterrence). The Court
also balanced public policy concerns and determined that, while the depletion of public
revenues and the punishment of innocent taxpayers were important considerations that
weighed against the assessment of attorney fees against governmental litigants, “those
considerations must be subordinate to a court’s authority to control the parties and the
litigation before it.” Id. ¶ 25 (emphasis added). On this basis, the Court upheld the sanction
of attorney fees as an appropriate exercise of the district court’s inherent power.
{21} The Regents contend that Baca stands for the proposition that a monetary sanction
imposed against a public entity under a court’s inherent power can only be upheld where the
sanction has a compensatory effect. We disagree that our Supreme Court advanced such a
rule in Baca. Our Supreme Court did not hold, much less convey a view, in Baca that
sanctions without a compensatory aspect are the equivalent of a punitive damages award.
And while our Supreme Court relied upon the fact that the payment of attorney fees have
both compensatory and punitive effects as a means of distinguishing attorney fees from
punitive damages awards, this was just one aspect of the Court’s analysis and did not form
the sole basis for the Court’s holding. We thus decline to apply the unique characteristics
of attorney fee sanctions raised in Baca in the broad manner suggested by the Regents.
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2. The Public Policy Arguments Advanced by the Regents Do Not Outweigh a
District Court’s Authority Under Its Inherent Power to Impose a Non-
Compensatory Monetary Sanction
{22} The Regents argue that a non-compensatory monetary sanction imposed against a
public entity punishes innocent taxpayers who took no part in the wrongful conduct and
depletes public revenues and, therefore, similar to Torrance County, these public policy
concerns dictate that a district court cannot exercise its inherent power to impose a purely
punitive monetary sanction against a public entity. Although we do not take lightly the
policy concerns raised by the Regents in this case, we ultimately conclude that these
concerns are “subordinate to a court’s authority to control the parties and the litigation before
it.” Baca, 1995-NMSC-033, ¶ 25. We explain.
{23} First, we do not view the Regents’ contention that a purely punitive monetary
sanction serves to deplete public revenues and must therefore be avoided as a justifiable
basis for limiting the authority of the district court to impose a monetary sanction against a
public entity. Indeed, any sanction imposed against a public entity for disruption of the
judicial process arguably results in an expenditure of public funds. Even in cases where the
sanction imposed is compensatory in nature, such as the awarding of costs or attorney fees
incurred as a result of the misconduct, the same potential for the depletion of public revenues
would occur. We note, for example, that the Regents were assessed—and paid without
complaint—$32,000 for the attorney fees that Plaintiffs had incurred in bringing the motion
for sanctions, the costs associated with locating a replacement for Dr. Paul, and the fees that
Plaintiffs incurred for Dr. Paul’s services prior to his withdrawal.
{24} Moreover, assuming that the Regents are correct that the $100,000 sanction imposed
by the district court was solely punitive in nature, we nevertheless do not share their concern
that the punitive nature of the sanction alone—i.e. the fact that the sanction punishes
innocent taxpayers—is enough to render the sanction inappropriate on public policy grounds.
In our view, sanctions are punitive by their very nature. See Black’s Law Dictionary 1458
(9th ed. 2009) (defining a “sanction” as “a penalty or coercive measure that results from
failure to comply with a law, rule, or order”); see also Warner v. Sw. Desert Images, LLC,
180 P.3d 986, 1001 (Ariz. Ct. App. 2008) (“A sanction is by definition punitive or coercive
in nature.”). That is, sanctions such as the dismissal of a case, default judgments, exclusion
of witnesses or evidence, and monetary fines all necessarily include some degree of
punishment and deterrence for the wrongful party. For example, in the criminal context, we
have upheld a lower court’s exercise of inherent power to dismiss a criminal prosecution as
a sanction against the government, see Candelaria, 2008-NMCA-120, ¶ 22, despite
recognizing that the extreme sanction of dismissal “punishes the public, not the prosecutor,
and results in a windfall to the defendant.” State v. Jackson, 2004-NMCA-057, ¶ 15, 135
N.M. 689, 92 P.3d 1263 (internal quotation marks and citation omitted). The policy behind
a district court’s inherent authority is the need to prevent abusive litigation practice and
preserve the integrity of the judicial process. It makes little sense to effectively strip a court
of its equitable power to control and punish the misconduct of those litigants associated with
9
public entities. To do so would effectively allow a public entity to hide behind a protective
shield thus giving it permission to engage in unethical conduct for which a private litigant
would surely be sanctioned. Accordingly, we decline to adopt a per se rule that a district
court cannot exercise its inherent power to impose a non-compensatory monetary sanction
against a public entity simply because the sanction may have a punitive effect.
{25} Finally, we must emphasize the unique procedural posture of this case. During the
course of the sanctions proceedings, the parties settled the underlying claims. Thus, by the
time the district court issued its letter decision imposing sanctions, the options for sanctions
available in the case were severely limited. Under these circumstances, the district court
chose a sanction that avoided many of the policy pitfalls the Regents complain of on appeal.
The imposition of a non-compensatory monetary sanction ensured that there was no windfall
to Plaintiffs yet would sufficiently deter the type of abusive conduct by litigants that
occurred here in the future.
{26} As a final matter, we reiterate the narrow holding in this case. We decide only that
a district court’s inherent power to award non-compensatory monetary sanctions applies
equally to public and private entities. We recognize that a court’s inherent powers are not
unfettered and should be invoked “sparingly and with circumspection.” Baca, 1995-NMSC-
033, ¶ 25. However, here, the Regents did not argue before the district court—and do not
argue on appeal—that the court’s factual findings of misconduct were erroneous or not based
on substantial evidence. Nor do they argue that the conduct did not rise to a level warranting
sanctions, that the amount of the sanction was not proportional to the violation, or that the
monetary distribution of the sanctioned sum to four charitable organizations was
inappropriate. Therefore, we do not address these questions in this opinion.
{27} Based on the foregoing, we conclude that a district court’s inherent power to impose
sanctions includes the authority to issue a non-compensatory monetary sanction against a
public entity.
CONCLUSION
{28} We affirm the district court’s imposition of the $100,000 non-compensatory
monetary sanction against the Regents. We deny Plaintiff’s request for attorney fees
incurred on appeal.
{29} IT IS SO ORDERED.
____________________________________
LINDA M. VANZI, Judge
I CONCUR:
____________________________________
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M. MONICA ZAMORA, Judge
TIMOTHY L. GARCIA, Judge (dissenting)
GARCIA, Judge (dissenting).
{30} I respectfully dissent in this case and view the issue very narrowly. Regents do not
contest the position that the district court can properly impose compensatory sanctions
against a governmental entity as part of its inherent authority. Nor do they appeal the award
of the compensatory sanction imposed by the district court. Instead, Regents ask this Court
to determine as a matter of first impression whether the district court has the right to exercise
its inherent legal authority to impose a purely punitive sanction against a governmental
entity for improper conduct during a legal proceeding. I disagree with the majority’s holding
that such an inherent right exists. See Majority Opinion ¶¶ 14-26.
{31} The majority labels the sanction imposed by the district court as a “non-
compensatory monetary sanction,” Majority Opinion ¶¶ 1, 11, 22, 26, and rejects Regents’
position that the $100,000 sanction was purely punitive. Majority Opinion ¶¶ 20, 23. Yet
the majority also recognizes that the sanction was issued for the purpose of being “severe
enough to put a stop to the practice” based upon “the misconduct at issue and the relative
size and resources of the wrongdoers. . . . [The court must] do more than merely compensate
the other party for their fees and expenses incurred.” Majority Opinion ¶¶ 9-10. Where a
sanction has no compensatory component and is issued exclusively for the purpose of
punishment and deterrence, the sanction is the equivalent of a punitive damages award. See
Baca, 1995-NMSC-033, ¶¶ 21-22. Here, the underlying case had settled, and Regents was
separately sanctioned for the entire amount of Plaintiffs’ compensatory expenses associated
with Sauder’s misconduct, including attorney fees, costs, and other related fees. Majority
Opinion ¶ 9. As a result and based upon the primary legal argument comparing the monetary
sanction award against Regents to a punitive damage award against a governmental entity,
the term “punitive sanction” is the appropriate term for the $100,000 sanction awarded in
this case.
{32} Regents limit their appeal to the punitive sanction awarded and the recognized
immunity governmental entities have from punitive damages under Baca and Torrance
County. Majority Opinion ¶¶ 15-16. The majority distinguishes the public policy grounds
for this governmental immunity based upon a need for additional control over abuses that
occur during the judicial process and the distinct legal concept for a jury award of damages
versus misconduct during judicial proceedings. Majority Opinion ¶ 18. It then asserts that
misconduct toward the court must be given greater weight than misconduct toward a party
when punitive punishment of a governmental entity is a consideration. Id.
{33} The majority correctly recognizes the competing public policy interests regarding the
award of punitive damages against a governmental entity that were addressed in Torrance
County. Majority Opinion ¶ 17. The need to protect public revenues and to prevent the
11
injustice of punishing innocent taxpayers rather than the officials at fault must be balanced
against the need to deter abuse of governmental power and to promote accountability among
governmental officials. Id. However, the majority failed to address the competing public
interests any further in its analysis. The majority instead continues its public policy analysis
by citing Baca to rely upon the district court’s authority to impose attorney fees as a sanction
and justify tipping the public policy scales in favor of awarding punitive sanctions for the
purpose of “control[ling] the parties and the litigation.” Majority Opinion ¶ 21. This effort
to distinguish the public policy decision expressed by our Supreme Court in Baca and
Torrance County is misplaced for two reasons.
{34} First, the competing public policy concerns must be addressed directly in order to
determine whether an actual need to impose punitive sanctions against a governmental entity
is necessary for the district court to control the parties and cases in the courtroom.
Compared to our juries, the district court already has significant non-punitive power and
authority to control the parties and the litigation under its jurisdiction. Baca, 1995-NMSC-
033, ¶ 11 (recognizing that district courts have inherent power “[t]o fine for contempt,
imprison for contumacy, enforce the observance of order” on “both litigants and attorneys,”
and to impose a variety of sanctions “in order to regulate [its] docket, promote judicial
efficiency, and deter frivolous filings” (internal quotation marks and citation omitted)); State
ex rel. Schwartz v. Kennedy, 1995-NMSC-069, ¶ 41, 120 N.M. 619, 904 P.2d 1044
(suspending or revoking a license for noncompliance with the conditions governing its
issuance was recognized as an appropriate regulatory sanction); United Nuclear Corp. v.
Gen. Atomic Co., 1980-NMSC-094, ¶ 201, 96 N.M. 155, 629 P.2d 231 (permitting a district
court to impose a variety of sanctions to command and enforce compliance with discovery
orders); State v. Martinez, 1998-NMCA-022, ¶ 6, 124 N.M. 721, 954 P.2d 1198 (allowing
the district court to impose a variety of sanctions on a defendant who fails to include a
witness he or she intends to call at trial, “including granting a continuance, prohibiting the
party from calling a witness not disclosed, or entering such other order as it deems
appropriate under the circumstances”); Enriquez v. Cochran, 1998-NMCA-157, ¶¶ 18, 48,
126 N.M. 196, 967 P.2d. 1136 (affirming the striking of its affirmative defenses and
imposing a specific duty of care on the Boys Scouts of America as a discovery sanction);
Rhinehart v. Nowlin, 1990-NMCA-136, ¶ 28, 111 N.M. 319, 805 P.2d 88 (permitting the
district court to hold a civil contempt proceeding “to coerce or force compliance with a court
order, or in the alternative, [to] impose sanctions by way of compensating the aggrieved
party and awarding that party his or her attorney fees and costs”); State ex rel. Bardacke v.
Welsh, 1985-NMCA-028, ¶ 19, 102 N.M. 592, 698 P.2d 462 (explaining that the sanction
of injunction “is warranted when the courts are being used as a vehicle of harassment”).
{35} In a real sense, these examples illustrate that the existing sanction powers possessed
by the courts are much broader than a jury’s power to deter an abuse of power or promote
accountability among governmental officials. In this case, the $1,500 sanction imposed
directly against Sauder is just one example of the latitude given to the court that is not
available to a jury. However, the broader punitive sanction of $100,000 that is neither paid
by Sauder nor capable of jeopardizing his public position or office would offer no further
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deterrent or other value to the public policy being implemented. Rather than punishing the
public official who committed the wrongful act, it is simply borne by innocent taxpayers.
The court, not the jury, already has broad power to issue effective compensatory sanctions
in order to deter any abuse of power and promote accountability among governmental
officials who appear in the courtroom. The majority’s justification for imposing an
additional punitive sanction against the public weighs heavily against the argument that the
courts, rather than juries, might need the additional authority to impose a purely punitive
award in order to deter an abuse of power and promote accountability among governmental
officials.
{36} Second, the majority’s position presumes that the jury process is incapable of
imposing punitive awards against a governmental entity in order to fulfill public policy goals
but that the courts possess some higher degree of capacity or understanding when it comes
to imposing punitive awards against the government. Such a presumption is erroneous. It
undermines the jury component of our legal system, the unique legal element that is one of
the most profound and respected aspects of our democratic society. See State v. Mann,
2000-NMCA-088, ¶ 84, 129 N.M. 600, 11 P.3d 564 (recognizing the profound democratic
function played by juries in a criminal prosecution); First Nat’l Bank v. Nor-Am Agric.
Prods., Inc., 1975-NMCA-052, ¶ 50, 88 N.M. 74, 537 P.2d 682 (recognizing juries as “the
institution best suited to reflect the sense of fairness and the conflicting values of a
democratic order”); see also Axelrod v. Phillips Acad., 74 F. Supp. 2d 106, 109 (D.C. Mass.
1999) (recognizing juries as “the foundation of our jurisprudence in a constitutional
democracy”); Holland v. State, 587 So. 2d 848, 877 (Miss. 1991) (Hawkins, J., dissenting)
(“Judgment as to what is a ‘just’ or ‘right’ decision can change with the times. Nothing,
however, can match the comfort of having men and women of your own stature pass upon
the merits of your case. The public at large in turn feels far more comfortable with a
[twelve]-man jury verdict, whatever it is, than it would with the same result having been
reached by some judge.”).
{37} It is an unfortunate mistake to presume that judges and not juries possess the
exclusive knowledge and ability to determine when a purely punitive award must be imposed
on a governmental entity and then paid by innocent taxpayers from public revenues. I
disagree with the majority view and believe the Supreme Court’s analysis in Baca directs
otherwise. See 1995-NMSC-033, ¶¶ 21-25.
____________________________________
TIMOTHY L. GARCIA, Judge
Topic Index for Harrison v. UNM Bd. of Regents, No. 32,215
APPEAL AND ERROR
Standard of Review
13
CIVIL PROCEDURE
Expert Witnesses
Sanctions
GOVERNMENT
Education and Schools
EVIDENCE
Expert Witness
Tampering with Evidence
Witnesses
REMEDIES
Punitive Damages
TORTS
Medical Malpractice
14